Should Investors Care About Cybersecurity?

I've got good news and bad news.

First the bad news. Cyberattacks are becoming more frequent and more destructive than ever.

As a result, the cybersecurity industry is likely to be increasingly in-demand, and that could be potentially very good news for investors.

Over the past couple months, we've seen an evolution in the tactics used in some of the most notable cyberattacks. I'm talking about the rise of what's knowns as ransomware.

Two major attacks that dominated the news this summer: the "WannaCry" in May and "Petya" in June. The hackers used a vulnerability in Microsoft (NASDAQ:MSFT) software to take control of their victims' IT system and prevent them from accessing their own data. They then demand a ransom to get control back.

In the second quarter of 2017, over 2.3 million ransomware infections were detected.

According to a report from Quick Heal Technologies, "ransomware attacks have increased - there have been 5 attacks so far with WannaCry and Petya as the notable ones. This trend sets off an unmistakable sign that attackers are shifting their attention towards attacks that make them more money and in an easier way. Ransomware campaigns, truth be told, have higher returns compared with data stealing and other malicious campaigns."

But these attacks can be very costly, even when the companies don't pay the ransom.

More . . .

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New Report: An Investor's Guide to Cybersecurity

Cyberattacks have become more frequent and destructive than ever. In fact, the amount of damage they cause is expected to double by 2021.

The cybersecurity industry is expanding quickly in response to these threats. A projected $170 billion per year will be spent to protect consumer and corporate assets.

Zacks has just released Cybersecurity: An Investor's Guide to Locking Down Profits, which reveals 4 promising buys. This brand new report is available until Sunday, August 20.

See Cybersecurity Picks Now >>

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Danish shipping giant Maersk lost upwards of $300 million in revenue when the Petya software took control of the company's IT system. A similar scenario unfolded at Mondelez International, maker of Oreo, Nabisco and Kraft food products. The company estimates a 3% decrease in Q2 revenue growth as a result of the attack.

And due to the much-publicized leaks of unreleased episodes of hit shows, including Game of Thrones, HBO and its parent company Time Warner have suffered serious embarrassment. They don't appear to have been impacted financially yet - other than the expense of additional security measures.

The hackers responsible have demanded $6 million to prevent future leaks. HBO isn't playing along.

The Silver Lining of Cyberattacks

Hackers don't just target large corporations. Small businesses and individuals are vulnerable to ransomware and other cyber threats, too. All in all, it is projected that attacks like the ones we've discussed will cause $6 trillion in damages globally per year by 2021.

Fortunately, now we can talk about the good news.

The upside to the increased frequency and severity of cyberattacks will be a commensurate increase in demand for security-related products. I believe these threats could put cybersecurity stocks back into the limelight. At present, most stocks are trading low compared to their all-time highs.

Various independent research firms forecast strong demand ahead. According to a Markets and Markets report, worldwide cybersecurity spending will reach $101 billion in 2018 and $170 billion by 2020. That's an average 23% per year growth rate, which makes for a promising investment opportunity.

Where to Find High Potential Cybersecurity Buys

This week, Zacks released a new special report called Cybersecurity: An Investor's Guide to Locking Down Profits.

It was written to help investors make well-informed investment choices in this industry. You'll discover what seems to be an inescapable next phase for the companies in the space. It also highlights 4 specific cybersecurity picks with strong profit potential.

Access to this report ends this Sunday, August 20. If you're interested in getting involved with this growing opportunity, I encourage you to look into this while it's still available.

Download the Cybersecurity Report Now >>

Good investing,

Brian Bolan

Brian Bolan is our aggressive growth expert and the editor of the Zacks Stocks Under $10 portfolio.